Immigrant dairymens dreams turn sour
From a strip mall in Wauseon, OH, a town of 7,200, Willy van Bakel built a multimillion-dollar business bringing fellow Dutch dairy farmers to America. They’re “dreamers” like himself, he says.
Van Bakel’s company, Vreba-Hoff Dairy Development, signed up 70 Dutch immigrants over the past decade for a package deal designed to help them start dairy farms here. Typically, van Bakel helped clients sell their farms in the Netherlands and used the proceeds as seed money to finance bigger dairies with more cows in America.
He often helped arrange for immigration papers, obtained government permits, and helped with incidentals like enrolling children in school. He pitched his countrymen with ads in Dutch trade magazines featuring cows in front of the Stars and Stripes saying, “Life Is Great in America!” Today, the dream has soured. About a dozen of his clients have filed for bankruptcy protection or are being foreclosed on by banks. Sixteen farms sit idle because construction was halted for lack of financing. Van Bakel says his lender reneged on an agreement to provide funding. Some of these farmers have been waiting for five years or more and still have no farm, despite having given van Bakel millions of dollars from the sale of their old farms.
Now van Bakel faces lawsuits from farmers, lenders
and suppliers alleging, variously, that he owes them money and that he misused their funds. Some farmers accuse van Bakel of overcharging them for the dairies and cutting corners on construction.
“He brings people over here for only one reason and that is to strip them as quickly as he can from all the money they have,” farmer Bert de Bruyn wrote in a letter seeking help from the Dutch consulate last year. The Dutch consulate declined to get involved. De Bruyn, until recently, leased a dairy from Vreba-Hoff and says he lost money on the arrangement.
Van Bakel, who is 48 years old, denies wrongdoing. He admits that he owes money to farmers and lenders but doesn’t currently have the money to repay them. He faults the recession, a steep drop in milk prices, and poor money management by farmers. He says: “It’s unbelievable that these same people are getting together and making a stink out of me. They just need somebody to blame.”
Most of the farms van Bakel helped build are operating. Tejo Willemsen, who moved to the U.S. in 2001, says he couldn’t have built his dairy without Vreba- Hoff. “It’s disturbing to me that people are trying to damage” van Bakel’s reputation, he says.
Posters of tulips and dairy cows decorate van Bakel’s office here in Wauseon, a farm town flanked by cornfields and grain elevators.
Maps of his homeland are dotted with flags marking the former homes of farmers who came to America.
Dairy farms in the Netherlands are relatively small; most have no more than a hundred cows. Regulations limit how much milk each farm can produce.
U.S. dairy farms often have more than 2,000 cows. In 1997, van Bakel built a 3,000-cow dairy in Hudson, MI. It thrived. Soon, he recalls, other Dutch farmers were asking, “If this makes sense for you, can you put it together for me?” In 1998, he established Vreba-Hoff Dairy Development and later set up an office in Wauseon. Visiting Dutch farmers toured van Bakel’s farm and were chauffeured around to potential dairy sites.
With most clients, Vreba- Hoff used farmers’ own money—usually several million dollars from the sale of their Netherlands farms—to secure land and permits and start construction. For farmers who lacked capital to complete a dairy on their own, van Bakel lined up financing from banks or private investors.
“The first time we saw his farm, we were in awe,” says Evert-Jan Greving, who hired Vreba-Hoff to build his family a farm in 2000. The Grevings filed for Chapter 11 bankruptcy protection in 2008.
Greving says van Bakel talked him into spending more than he had originally anticipated to build the dairy. Van Bakel says the
Grevings ordered special adjustments to their dairy that drove up construction costs.
Some Vreba-Hoff farmers have done well, despite the usual hardships of farming. Bert Vander Made and his wife, Corrie, moved to Sherwood, OH, in November 1999 after hiring Vreba-Hoff to build a 600-cow dairy. They later expanded to 1,500 cows and were able to move into a nice house down the road. “We all knew it would be hard,” Mr. Vander Made said.
In 2007, the cost of producing milk rose along with commodity prices. Last year, milk prices plunged to 30-year lows amid weak global demand, pushing many U.S. dairy farmers out of business. Van Bakel says he struggled to make debt payments with shrinking milk income, as did many of his clients.
In 2008, one of van Bakel’s main lenders, AgStar Financial Services of Mankato,
MN, halted a $150 million program to build dairies that Vreba-Hoff expected to tap.
AgStar Chief Executive Paul DeBriyn said its dairy investments hadn’t been meeting financial targets. The bank has initiated foreclosure proceedings on eight of 17 Vebra-Hoff-sponsored dairies.
The economic situation made finishing construction on a number of new dairies impossible, van Bakel says. Of the 16 dairies that remain unfinished, two are “nearly complete,” he says, while the rest consist of sites that are excavated and “in preparation for construction.”
Dirk Jan Visser moved to Ambia, IN, in 2004 after hiring van Bakel to build his family a 1,700-cow dairy. The dairy was nearly complete when crews stopped showing up in October 2008.
Van Bakel says he halted construction because he couldn’t get financing.
“The whole process is emotionally draining. We didn’t think it would take this long to get it going,” said Visser.
In 2005, Peter van der Burg sold van Bakel his Netherlands dairy and moved his family to Woodville, OH, after hiring Vreba- Hoff to build him a new one. Today, the farm is just some piles of dirt on an otherwise empty lot.
In a lawsuit filed in Fulton County Court in Ohio, van der Burg alleges he was lured to the U.S. by van Bakel as part of a scheme to use his money as free working capital to finance older projects. He demands a refund of around $2.6 million plus damages.
Van Bakel says he’s “on the cusp” of securing aid from at least two private investors in India. The new capital, he says, will be used to pay off lenders, buy back some of the farms and build more dairies—in Africa and India. — DTN